Consensus on supplier selection objectives in cross-functional sourcing teams

Abstract

Purpose– A key driver of procurement effectiveness is the alignment of the procurement function with interlinked functions, such as R & D, engineering, production, and marketing. In the strategic management literature, the degree of alignment of individual team members on strategic objectives is termed “consensus.” The purpose of this paper is to investigate antecedents of consensus on objectives in cross-functional sourcing teams, the relationship between the degree of consensus and supplier performance, and moderators of the consensus-performance relationship. To do so, it ties strategic management literature to SCM and supplier selection research. As a result of these investigations, this research holistically introduces the concept of consensus to the discipline.Design/methodology/approach– The study analyzes a sample of 88 sourcing teams (233 team members) from three manufacturing companies using regression analysis and moderated regressions.Findings– Consensus on objectives for supplier selection among sourcing team members is positively related to the selection of higher performing suppliers. Sourcing team member experience is positively related to the level of consensus, and formalization of the selection process positively moderates the consensus-performance relationship. Team demographic diversity does not affect consensus among team members or supplier selection effectiveness.Research limitations/implications– This study investigates consensus on objectives as a state within the sourcing team; it does not analyze how decision-making processes unfold in situations of low- or high-initial consensus among sourcing team members.Practical implications– This paper provides insights into the drivers and effects of consensus on objectives and formalization of supplier selection in cross-functional setups.Originality/value– This research addresses a gap in the SCM literature by investigating the role of consensus on objectives and thereby contributes to a better understanding of cross-functional sourcing team setups and effectiveness. The study introduces a key construct from the strategic management literature to supply management research, and empirical evidence shows how consensus can improve supplier selection performance.